SAP Purchase-to-Pay (P2P)
End-to-end SAP purchase-to-pay cycle from requisition to payment posting
ERP SystemsLead Time
349.7h
Cycle Time
2.7h
Wait Time
347.0h
PCE
0.7%
Stages
8
Bottleneck
Payment Run (F110)
Value-Add vs Non-Value-Add
Value-Add (VA)
An activity is value-add if it meets all three criteria:
- The customer is willing to pay for it
- It transforms the product or service
- It is done right the first time
Examples: Assembly, diagnosis, treatment, coding, machining, testing
Non-Value-Add (NVA)
Activities that consume time or resources but don't add value from the customer's perspective:
- Waiting — queues, approvals, batching delays
- Transport — moving materials or information
- Motion — unnecessary movement of people
- Rework — correcting defects or errors
- Over-processing — doing more than required
Note: Some NVA is necessary (compliance, safety). Target unnecessary NVA first.
Process Timeline
Value-Add vs Non-Value-Add
Bottleneck Analysis
Stage Efficiency
| # | Stage | Cycle (h) | Wait (h) | VA | Resource | Defect % | Efficiency |
|---|---|---|---|---|---|---|---|
| 1 | Purchase Requisition (ME51N) | 0.5 | 2.0 | VA | Requestor | 12.0% | 20.0% |
| 2 | Approval Workflow (1-3 levels) | 0.1 | 48.0 | NVA | Approver(s) | 5.0% | 0.2% |
| 3 | Purchase Order Creation (ME21N) | 0.5 | 4.0 | VA | Buyer | 8.0% | 11.1% |
| 4 | PO Dispatch to Vendor | 0.1 | 1.0 | VA | System | 2.0% | 9.1% |
| 5 | Goods Receipt (MIGO) | 0.5 | 72.0 | VA | Warehouse | 6.0% | 0.7% |
| 6 | Invoice Receipt & Verification (MIRO) | 0.5 | 48.0 | VA | AP Clerk | 15.0% | 1.0% |
| 7 | 3-Way Match (PO/GR/IR) | 0.25 | 4.0 | VA | System / AP | 10.0% | 5.9% |
| 8 | Payment Run (F110) | 0.25 | 168.0 | VA | Treasury | 2.0% | 0.1% |